Retirement Planning, Elder Law, and Senior Finance Prescription Drug Prices Falling for Retirees 5/10/2023 | By Sandra Block Concerned by prescription drug prices? Federal legislation could help retirees with by lowering costs of some medications. If you’re enrolled in Medicare and spend a lot of money on prescription drugs, legislation enacted last summer could lower some of your expenses. The prescription-drug provisions in the 2022 Inflation Reduction Act will be phased in over seven years, but some take effect as early as this year. To get the most out of these cost-saving provisions, you need to be vigilant, and you may need to make some changes to your existing prescription-drug regimen. Prescription drug prices with changes Caps on insulin payments If your insulin is covered by your Part D prescription-drug plan, your co-payments are capped at $35 a month, as of Jan. 1. For beneficiaries who use an insulin pump, which is covered by Part B, the $35 co-payment cap kicks in July 1. The caps take effect automatically, but if your insulin is covered by your Part D plan, you may want to review it. There are more than 70 different types of insulin on the market, and Part D plans have the option of deciding which ones to cover. Diabetic patients who aren’t on Medicare could also see their costs decline. Eli Lilly recently announced that it’s slashing the cost of its commonly prescribed insulin drugs and expanding a program that caps out-of-pocket costs at $35 a month. Free shingles vaccines Vaccines for the flu, pneumonia, hepatitis D and COVID-19 are covered by Medicare Part B, generally with no co-pays. But the shingles vaccine, which the Centers for Disease Control and Prevention recommends for everyone 50 and older, is covered by Part D and may require a co-pay or coinsurance, depending on the plan. Starting this year, Part D plans must cover the shingles vaccine, along with other adult vaccines recommended by the CDC, at no cost. Greiner says not all pharmacies are aware of this change, so if you’re on Medicare and were charged for a shingles vaccine administered after January 1, contact your Part D plan or a SHIP counselor for help getting a refund. Rebates Starting this year, manufacturers of drugs used by Medicare beneficiaries will be required to pay rebates to Medicare if their prescription drug prices increase faster than the rate of inflation. The formula used to calculate rebates will be based on the drug’s average price, so this provision could have a “spillover effect,” slowing price increases for all users, not just Medicare beneficiaries, says Leigh Purvis, director of health care costs and access for AARP’s Public Policy Institute. What’s ahead Starting in 2024, annual increases in Part D premiums will be capped at no more than 6% a year. In addition, participants will no longer pay coinsurance for Part D catastrophic coverage, which kicks in once out-of-pocket spending exceeds an annual threshold ($7,400 in 2023). Starting in 2025, Part D participants’ out-of-pocket spending will be capped at $2,000 a year. In future years, the cap will be indexed to the rate of increase in Part D per capita costs. Finally, starting in 2026, Medicare will begin negotiating prices for certain high-priced drugs covered by Part B and Part D. CMS plans to announce the first 10 drugs it will select for price negotiations by September. Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com. ©2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC. Read similar retirement articles on Seniors Guide like this one: How to Save For Healthcare in Retirement Read More Sandra Block Sandra Block is a senior editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.